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Yahoo: Its Own Bad Investment

Funds Used for Buybacks Could Have Been Used To Aid Company's Growth

Updated Feb. 8, 2008 12:01 a.m. ET

It took Microsoft's $44.6 billion bear hug to highlight one of Yahoo's biggest mistakes of the past three years: spending $4.6 billion on two share buybacks.

In the past three years, the Internet titan has been buying its shares at prices far above the current level. The average price of Yahoo stock since March 24, 2005 -- the start of its first, $3 billion buyback -- is about $30 a share. For much of the past year, it has been lower....